This Crypto Exchange Is Putting the Brakes on FOMO Demand - Decrypt

This Crypto Exchange Is Putting the Brakes on FOMO Demand – Decrypt

News


In brief

The price of Bitcoin has gone from $30,000 to $40,000 in one week. On January 7, several exchanges, including eToro, had trouble handling high trading demand. eToro has temporarily instituted higher minimum investments for new users as a result.

Yesterday, cryptocurrency exchanges including Binance, Coinbase, Gemini, Kraken all experienced technical issues due to high demand as the Bitcoin market rallied above $40,000.

While the exchanges’ general approach was to try to add additional capacity, other platforms are looking to put the brakes on demand.

eToro, a mobile crypto and stock trading platform based in the UK and Cyprus, today temporarily increased the minimum amount new investors must deposit from $200 to $1,000.

Amy Butler, eToro’s Global Head of PR & Communications, told Decrypt the change was necessary to deal with “unprecedented demand” and make sure eToro’s existing 17 million users can continue using the platform without a hitch.

“In this first week of 2021 we have seen days with over 40,000 new registered users in a day and volumes of crypto trades at 10 times the average of last year,” she said.

While she couldn’t say exactly which assets are driving the demand, Bitcoin has played a big role. The price of the asset stood at under $30,000 on January 1. It’s since increased in value by 25%.

Exchanges everywhere are being forced to keep up.

Kraken Chief Commercial Officer Bobby Zagotta told Decrypt the US exchange “has experienced a marked pickup in customer registrations of the past month with the number of accounts created in one day breaking records set during the 2017 bull run.”

This could create opportunities for exchanges to innovate. Paul Veradittakit, partner at VC firm Pantera Capital, told Decrypt: “We think there is a lot more fuel in this bull run. I think this is great opportunity for centralized exchanges to increase market share by making their onboarding/KYC more efficient, increasing minimums and communication with larger customers, and providing better customer support.”

So, the FOMO is real as Main Street investors watch Wall Street investors like Paul Tudor Jones pour money into crypto. Unfortunately for them, upping the minimum investment fee increases the barrier to entry—a primary selling point of eToro. (eToro did not respond to a Decrypt question about how long the temporary increase would last.)

According to eToro, it’s not all crypto, however. Stocks are also in demand, with Nio, Tesla, Palantir, Moderna and Alibaba ranking as the most-bought stocks on the platform for December 2020.

eToro, whose closest analogue is probably Robinhood, took its mobile app live in 2012. The firm began selling stocks without a broker fee in 2013 and added Bitcoin trading (in the form of a stock contract) in 2014. It then began adding direct trading for multiple cryptocurrencies in February 2017 before moving into the US market in 2018.


Source link

Latest Crypto News


Popular Links

Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments